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Oct 8, 2009

RIL Rewards 1:1 bonus to Shareholders

Mukesh Ambani group firm Reliance Industries on Wednesday said it will issue one bonus share for every share held in the company.

The board of directors of the company at its meeting held today, recommended issuance of bonus shares in the ratio of one equity share of Rs 10 each for each share held, RIL said in a filing to the Bombay Stock Exchange.

The issue of bonus shares is subject to the shareholders' approval, it added. The board has also declared a dividend of Rs 13 per fully paid-up equity share of Rs 10 of the company to the shareholders, the company said.

We had committed to reward our shareholders on successful completion of our two world-class projects. I am really delighted to share with you the excitement we all have in flawless execution of the upstream project which has been recognised globally as a defining accomplishment, said RIL's chairman, Mukesh Ambani.

Our refinery project has also set new benchmarks and made Reliance the operator of the largest refinery site anywhere in the world. These are achievements that we should all have pride in and are milestones in our journey of creating value for our shareholders, he added.

Big surpriseInvestors' darling Reliance announced issue of bonus shares after a 12 year-hiatus, a move that analysts expect would flare up the markets on the eve of Diwali.

The company founded by Dhirubhai Ambani, credited for drawing retail investors to stock markets in the 1970s, recommended an issue of one bonus share for every share held by shareholders and would help unlock value.

Analysts said that the surprise announcement of a bonus issue by RIL, will definitely act as trigger for the market.